Temporary changes to layoff procedures and unemployment benefit in Finland due to the coronavirus epidemic

Temporary changes in Finnish law concerning the notice and minimum negotiating periods for layoffs, the trial period and the employer’s duty to re-engage a redundant employee took effect at the beginning of April. These changes will remain in force until the end of June.

Some temporary changes have also been made in the conditions of eligibility for unemployment benefit. These changes are in force retroactively as of 16 March, and will continue until the end of June, early July or the end of July, depending on the change.

The changes are the result of proposals made by labour market organisations to the Finnish government, with a view to helping employers adapt more quickly to falling demand for products and services caused by the coronavirus epidemic.

Accelerated layoff procedures to be settled by collective agreement

The temporary legal amendments reduce the layoff notice and minimum negotiating periods to five days. An employer may also lay off employees before commencing co-operation negotiations under certain circumstances when demand for the products or services of a business has fallen sharply and suddenly due to the coronavirus epidemic.

Temporary staff may also be laid off while the legal amendments remain in force. A temporary employee who has been laid off will be eligible for unemployment benefit and entitled to terminate the temporary employment contract with immediate effect.

The notice and minimum negotiating periods for layoff will be settled by collective bargaining, so the legal changes will not take effect in an industry until its trade unions and employers’ federations have amended their collective agreements. These unions and federations are also free to make other arrangements concerning these notice and minimum negotiating periods.

Most unions affiliated to SAK have already negotiated changes to their collective agreements.

No benefit sanctions or waiting periods for trial period terminations

It will also be lawful until the end of June to terminate employment with immediate effect during a trial period on grounds of redundancy, and not only for failings on the part of the individual employee. This will not result in sanctions or waiting periods when seeking unemployment benefit. A trial period may not exceed six months.

The employer’s duty to re-engage a redundant employee will also be prolonged to 9 months from the current 4 or 6 months. This is the period during which an employer must offer work to a former employee who was made redundant and is still looking for work, if the employer needs to recruit staff for duties that are the same as or similar to those formerly performed by the redundant employee.

These changes will only take effect in an industry after its trade unions and employers’ federations have agreed.

Improvements in unemployment benefit

Some temporary changes in the unemployment benefit system seek to support the incomes of employees who lose their jobs. These changes are in force retroactively as of 16 March and will expire on 6 July.

The five waiting days at the start of a claim will no longer apply, so unemployment benefit will be paid immediately from the first day of unemployment or layoff. This change applies to all unemployment benefit claimants, including those receiving earnings-related daily allowance, basic daily allowance and labour market support.

The employment condition for earnings-related and basic daily allowance has been shortened from 26 weeks to 13 weeks (i.e. 3 months). The employment condition for a family member of a self-employed person has been shortened from one year to six months.

This means that the employment condition is satisfied when the claimant has worked for not less than 18 hours a week in at least 13 weeks over the previous 28 weeks, with monthly earnings according to the collective agreement for the industry, or of at least EUR 1236. A further condition of receiving earnings-related daily allowance is that the employee must have been a member of an unemployment fund over the same period.

Payment of basic or earnings-related daily allowance to an employee who is made redundant over the period from 16 March to 30 June will not count as part of the maximum daily allowance payment period, which is 300 to 500 days, depending on the age and working history of the claimant. This will apply to employees who have been completely laid off, and to those whose layoff takes the form of a shorter working week or working day. The maximum duration of basic or earnings-related daily allowance payments will remain unchanged for other unemployed claimants.

A separate interim law will also entitle a laid-off employee to unemployment benefit until 31 July, even if the claimant has engaged in self-employment or studies during the lay-off. The claimant will nevertheless be required to accept any work offered by employers during the layoff.

The self-employed and freelancers have enhanced access to unemployment benefit until 30 June, and may seek labour market support from Kela without having to stop trading if they are unable to work full-time or if their livelihood is reduced due to the coronavirus epidemic.

Register as a jobseeker by no later than your very first day of unemployment or layoff

Remember to register as a jobseeker at the Employment and Economic Development Office (TE Office) on learning that you have lost your job or been laid off, and to do so by no later than the first day of unemployment or layoff.